Designing out crime

The Financial Times reports today that Apple is expected to install near field communication (more popularly known as 'wave and pay') technology for the next version of its iPhone, enabling customers to pay for goods and services using their phone. It could potentially turn the iPhone into a credit card, key-ring, travel pass and movie ticket in one fell swoop.

Some of the world's biggest payment firms, mobile operators and retailers are already preparing for the roll-out of this new technology. For example, from this summer, McDonald’s in the UK will have the terminals required to “pay by wave” via properly equipped credit and debit cards in 1,200 restaurants.

Understandably, the main focus of the FT's story is on the potential for the roll-out of this technology to boost mobile commerce and simplify transactions. However, another less immediately obvious implication is its potential to push up street crime. Home Office mandarins have long worried about the potential for new types of consumer goods - often designed in low-crime countries, such as South Korea and Japan (where, by the way, paying through your phone is already widely popular) - to become 'criminogenic' once they reach British shops. Just as insulating a house is more efficient if done during the building phase (rather than retrospectively), so the same applies to the designing out of crime. I've just been reminded of this by an old Home Office evaluation of the 2002 Street Crime Initiative, which concluded that one of the main causes of the sudden rise in robbery had been the increasingly widespread use of mobile phones (particularly by students). I somehow doubt whether Apple are taking any of this account in thinking about how they roll out the new iPhone 5 later this year.

In 2007 the Home Office invited leading designers to sit on a panel called the 'design and technology alliance' who were tasked with helping the government work with industry in finding ways to design out crime from new technologies. I'm not sure whether this group still exists but this probably needs to be one someone's agenda...

Piers Morgan trashes the special relationship

I've been feeling guilty. As a Fulbright Scholar, I am obligated to promote mutual understanding between our two great nations, not only through the exchange of ideas and knowledge but by becoming an active member of my local community and exploring the many layers of American cultural life. I was reminded of this on Monday, which was Martin Luther King Day and this year was dedicated to the principle of community service. Having spent most of my time here confined to the offices and lecture halls of Harvard I concluded that I needed to be a better ambassador for Britain and promised myself that I would do some more local volunteering.

Then I switched on the TV to see that Piers Morgan had replaced Larry King and had his own chat show on CNN prime time. To launch his new series he was being interviewed by CNN superstar Anderson Cooper. There is something curiously disorientating about watching British people on American TV - I can only describe it as a feeling of both semi-pride and embarrassment: a bit like having an uncle turn up at school assembly. However, those feelings quickly subsided and were replaced by furious indignation as Morgan proceeded to trash his home country to an audience of millions.

First, he recycled the familiar American stereotype (used by countless Hollywood directors) of British class snobbery: apparently, if one makes a lot of money and owns a nice car in Britain one is sneered at - unlike the US, which of course, has no concept of class. Whilst this offended my sensibilities, I could sort of live with it on the grounds that he needed to have something to say about British culture that would play well with American audiences. However, things got worse. Anderson Cooper described how on a recent trip to London, he had been surprised to find that rather than being full of polite men in bowler hats, it was awash with drunken teenagers. Not only did Morgan fully agree with this assessment, he went further: according to Morgan, Britain is now full of drunken, violent imbeciles that will swear at/ stab/ puke on you the minute you venture out of your door. Ok things can get a bit hairy on a Saturday night in Croyden, I thought to myself, but Morgan has really crossed the line here. He is undermining the special relationship!

I concluded that Morgan was carrying out the opposite of Senator Fulbright's noble intentions: reinforcing mutual prejudice and fear. But I have to admit it made me feel less guilty about my own role as an ambassador. At least I've not done any harm...

Inside Job - a review

A new year a new start. After an extended Christmas break I intend to start blogging again with more regularity.

To start off the new year I thought I'd have a stab at reviewing the film Inside Job. Its an account of the causes and consequences of the 2008 global financial crisis, which started with the unravelling of thousands of 'sub-prime' mortgage loans in the US and eventually brought the entire financial system to the edge of total collapse.

Although most critics have praised its clear sightedness, pointing out that the Director, Charles Ferguson is an academic by training, the film is fundamentally a polemic: its overriding objective is to leave one angry, rather than enlightened (although I think it does a good job of both). Greedy bankers are the prime target - the film paints them basically as criminals who took advantage of decades of deregulation in order to get rich quickly and didn't give a damn about the consequences.

As you might expect, the film packs in a lot of information (including a fair amount of economics theory) but does a good job of explaining, in laymen terms, how the invention of complex financial derivatives (famously described by Warren Buffet as 'weapons of mass destruction) made it possible for banks to bundle bad consumer loans into securities, certified as sound by credit rating agencies (who were paid for by the banks) and then insured via credit-default swaps, which allowed bankers to both sell those unreliable securities to gullible clients whilst simultaneously betting that they were going to fail.

Thankfully, the film does not make the mistake of wallowing in conspiracy theories or wheeling out half-baked narratives of capitalism's demise, but tells an essentially simple story of how a combination of rigid ideology and groupthink drove some very intelligent men to pass some very bad laws, which encouraged some very greedy men to take risks with other people's money. In fact, one of the most interesting aspects of the film is its critique of the role of the economics profession in providing the intellectual framework that legitimised deregulation, in particular, suggesting more than a few prominent economists were corrupted by consulting fees, seats on boards of directors and so on. I look forward to asking Larry Summers about his own role when I attend his lectures at Harvard in the Spring...

The film does has weaknesses. It is perhaps overly fixated on the issue of regulation (in many sectors of the industry, regulation was tight - the point is that banks found ways around it) and does not sufficiently cover the role of the shadow banking system (hedge funds, money market funds etc) in the financial collapse. Its also a little manipulative and intellectually disingenuous at times, for example, the tendency to assume borrowers were all gullible victims, rather than active participants in the crisis. However, overall, its extremely thought provoking and very well made. In summary, highly recommended.